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After a serious look at the risks, you’ve decided that the only way to attract the talent you need for your startup is to offer equity in your company as part of the compensation package. There are only two small problems: You don’t know how these kinds of deals work, and you don’t know how to put an equity-tied deal together. How do you even determine how much equity to offer?

In this week’s episode, host and business coach Tom talks about the logistics of providing equity-based incentive programs to employees. As always, Tom is joined by co-host and producer Jason Pyles.

• Show intro, and recap of employee equity risks

• “How do I give equity to my employees?” (1:00)

• Setting realistic expectations for startups (2:00)

• Employee equity as an exchange in lieu of compensation (4:30)

• There are no standard approaches to employee equity in startups (6:00)

• Understanding the terms of an equity agreement (7:30)

• “Rabbit hole time” (9:30)

• Why equity that “feels right” is often wrong (10:30)

• Determining the fair market value for employee equity (11:00)

• Incentives in addition to equity for potential employees (17:30)

• Applying company valuation to the equity agreement (22:30)

• Terms and conditions of the equity agreement (25:00)

• Next episode: Bringing on new talent with equity agreements

• Sign off, and how to contact the show